Living Paycheck to Paycheck- How to Manage Your Money Better

When I did the latest reader poll here on Celebrating Financial Freedom a few months ago, the biggest problem most of you said you were facing is that you are living paycheck to paycheck. It’s a problem that I see almost daily when readers contact me for financial advice.

Unfortunately, living paycheck to paycheck seems to be the norm for the average family, and the research backs this up.

Most people are living paycheck to paycheck not because they’ve experienced some kind of financial disaster that set them on their heels. For the most part, the paycheck to paycheck life is caused by one of these two things:

Read on and I’ll show you how to stop living paycheck to paycheck. I’ll also hook you up with some excellentresources to help you get started.

Living Paycheck to Paycheck is Normal, Not Necessary

Now, the interesting thing is that most people who live paycheck to paycheck will tell you the reason they live that way is that they don’t make enough money. However, that’s usually not the case.

In 2016, the median income per household in the US is $57,617. Of course, that’s not a massive income, but it’s enough to get by comfortably if you manage your money well. Yet I’ve seen people making six figures have trouble keeping the lights on.

I’ve also seen people with very little income stretch a dollar so far it would snap back and put their eye out if they weren’t careful. But even with a low income they managed to stay out of debt, save money and live within their means. Sure, they live paycheck to paycheck, but they don’t have a ton of debt weighing them down, limiting their choices and freedom.

So How Do You Stop the Paycheck to Paycheck Cycle?

Change Your View of Debt

Debt is a cancer to your finances that spreads over time and will completely take over if you let it. Once you understand that all the interest and fees are causing you to spend 10%, 20%, even 30% more for your stuff, then you will have enough incentive to start changing your finances for good.

Manage Your Money Better

Once you change your perspective on debt, then it becomes a matter of changing the way you manage your money. Most people who are living on the edge financially don’t have a concrete plan when it comes to managing money. They operate on more of a general idea of their finances instead of a clearly laid out plan.

This lack of organization is why the average family can’t seem to get ahead.

I’ll show you how to start putting together a solid financial plan below.

The Plan for Managing Your Money Better

Once you change how you view debt and understand that you have to have a plan for your money, then you can start your journey out of the paycheck to paycheck lifestyle. Here are the necessary steps:

Evaluate Your Income

If you have a low income, it may be all you can do just to meet your immediate needs. However, when you are proactive and have a plan for your money, you can at least avoid getting into debt and making your situation worse.

If you don’t have a low income, a good financial plan is just as important. Actively managing your money allows you have a clear plan for every dollar so you don’t needlessly waste money.

Make a Budget

Doing a monthly budget is the key to stopping the paycheck to paycheck cycle. Spending your money on paper before you spend it in the real world allows you to have complete control over your money. Yeah, I know it doesn’t sound like a lot of fun. But hey, living paycheck to paycheck is no picnic either!

Keep Moving Forward

As you start budgeting and paying off debt, it’s likely you will run into an obstacle or two along the way. No matter what happens, keep moving forward with your plan. You may feel like you’re making little or no progress at times when you’re leaving the paycheck to paycheck life behind. But when you stick with it, use discipline, and relentlessly pursue your goal, you will come out on the other end smelling like a rose!